How to Start Drop Shipping Business in Kenya with Less than 10k

Often and misleadingly described as affiliate business, drop shipping is different from affiliate business in that it is a retail process that trades in tangible goods. Drop-shipping is a retail business where the “store” does not store the goods it sells in a warehouse or retail shop as stock.

The best examples of dropshipping retailers in Kenya are Jumia  and Kilimall although there are a host of others including eBay, Shopify (a merchant platform) and Amazon.

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How it Works 

When a retail outlet is a drop-shipping enterprise, it sells the products by running a high traffic website that displays pictures and often detailed descriptions of the product. On a buyer paying for a purchase, the retail outlet pays the product source who is a wholesale dealer or a manufacturer.

The retailer undertakes the onward shipping and dropping it directly to the buyer. Subsequently, the seller (or affiliate,) does not see or handle the product. It moves directly from the retailer to the buyer.

The primary difference between dropshipping and the traditional retail model is that the retailer doesn't keep stock or inventory of the goods they have for sale. Their display shop is a website. The retailer purchases the goods on demand made directly from the seller, who is himself a customer.

The retailer buys stock from the wholesaler or manufacturer only after payment has been received. In principle, as a seller in the dropshipping business, you connect the retailer with a buyer as a middle man. You too to do not need inventory. You collect money from the buyer and forward it to the retailer, who then delivers. This makes dropshipping business one of the best businesses to start with little money. It also requires a high level of integrity on the part of the seller.

How you Enter into the Dropshipping business 

When you enter into the drop shipping business, you work as an independent seller. You start by opening an account on the retailer’s page. On this page you are provided with a unique identity that will be used to trace purchases made through your affiliate links. Links are timed and expire after a stipulated time, and thus the affiliate must keep track of where their links are displayed. This backoffice account is also where your payments will be reflected.

How You Get Paid 

You are paid for generating sales by using the online display provided by the retailer. There are two primary ways of doing this.

1. Through your personal website (highly recommended) or through social media you display the images of the product associated with the unique link you have from the company. The customer can either, pay you directly, or go to the link and buy directly from the retail outlet. The retail outlet will give the commission rate for the product.

2. Although the idea of buying online is catching on, a lot of people are jittery about making a purchase online. In this case, you create an in-between method of promoting the product and receiving the cash directly. On receiving the cash, you then go to the retail site, buy the goods and the retailer ships them directly to the customer.

You make money from the selling price, which is lower than the buying price. If there are no refunds, the retailer will then pay you for that sale in accordance to the commission price they set on their page.
Another way that sellers make more money is to sell the product at a slightly higher fee than the recommended retail price. They then keep the difference and forward the retail fee to the retailer. Thus they earn from the commission and from the direct price difference.

How to Invest Your Kshs 10,000 or less in this Business 

Although you do not require to buy inventory, which makes this an extremely affordable business to start, you do have to provide for your business costs. Your business costs are:
1. Data costs: to generate attractive income, you need to build an audience on social media. Thus you need to allocate time to generate a social media following. This can be through joining existing groups. It can be through building your own community. It can be through running your own WhatsApp selling group.

2. Website development: It comes highly recommended that you run your own website to provide a landing page for the buyer to make a buying decision. The strategy is called attraction marketing and works better for you in the long run.

In this case, you will need to have the images of the product provided on the retailer website to share on your website and visible to the potential client. On their making a buying decision, they can then fill in their details on a form on your website to ensure you have the right information to buy on their behalf.

3. Content Development: It is also favourable to do blog articles and product reviews on your own site and provide links to the products on your own page. This is an important step in the larger process of attraction marketing. Since links are timed, you are able to manage them better on your own site.

4. Telephone time: You will also need to spend on speaking to customers and discussing their buying decisions with them. You are the seller they are in contact with and so it is you they will communicate with in regards to pricing, details on what to expect, and such buyer concerns.

5. Electricity and data: in addition to learning your backoffice, you must create time to be online to track the delivery and mitigate any client matters that may arise.

Once the sale is completed, the buyer then deals with the retailer for issues such as refunds, and complaints. To give your customers a favourable buying experience, work to take over these functions as soon as possible to secure yourself loyal customers. That you can start with little to no experience makes drop-shipping a great business idea for Kenya youth.

How Much Can You Make 

Dropshipping retailers pay on commission and only a percentage of the product price. Most pay a commission ranging from 5% to 15% of the item retail price. They will give their terms and conditions of service on their affiliate backoffice where you know exactly how much you will make on each item. The percentages are usually given in a category of products. That is for instance, household electronics will have a different percentage from baby products, etc…

To learn more about the dropshipping business

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